Friday, September 29, 2017

I think gold has bottomed out about 1.5 years ago in December 2015. Then we had a strong performance in 2016 where we came back. At the end of last year, we were again at a relatively low level and stocks were depressed. Since then gold mining ETF is up more than 18 percent vis-à-vis DSNP which is up by 9 percent. There are many gold shares that are up between 30 and 300 percent. In my view, the media in the U.S. has a very strong bias for FAM and FAM-related stocks.

The mining sector does not obtain or receive the necessary attention from the media in the U.S. So, people don’t know how well gold shares are doing. You take American Barrick, Newmont Mining..these are big companies. From December 2015 to today, they are up maybe by 300-400 percent. That people don’t talk about. They talk about Google, Amazon. But the strong performance of the mining companies over the last 2-3 years is not mentioned.

Now they had a big move recently because gold broke out above 1,300 dollars an ounce. So, they are near term overbought. But any investor when he thinks through..in Jackson Hole, you encounter the typical group thinking phenomena. Yellen, Draghi and Kuroda talking together. Of course they coordinate monetary policies and of course they will print more money in the long run. So the purchasing power of paper money is going down and so I would own some gold. The new thing is the cryptocurrencies. That is a wonderful thing.

Why do we have crypto currencies? We have it because an increasing number of people don’t trust paper money anymore and they don’t want money that is controlled by the central banks, that pollutes Jackson Hole.

Tuesday, September 26, 2017

I think the beauty about Asia, in terms of being an active manager, is that markets do not move all in concert. There are some markets that are strong. Let’s take the Indian market. It bottomed out in September 2013 after around 17,000 on the Sensex and since then its up more than 80 percent. Many other markets since 2013-14 are actually down. And so India had a huge move. This wasn’t the case for China until recently.

Recently, China has been picking up. The economy looks slightly better at the present time because there is also a massive injection of liquidity both through the government and the banking sector. Suddenly now, western investors are realising that maybe we are being bearish about China. Yes, they have a credit bubble but so does the whole world. Maybe the Chinese credit bubble can be managed whereas in other countries the credit bubble may be a bigger problem particularly with respect to pension firms and unfunded liabilities.

So, the money is suddenly flowing into China and, I have to say, I am not quite bullish about China. But, more than a year ago, I started recommending Macau gaming stocks, asset play on the Chinese recovery. Most of these stocks have almost doubled in price.

Saturday, September 23, 2017

I had argued for years that I would rather be invested in India than in the U.S. But I have also pointed out that it’s actually a miracle that India grows at all given the horrific bureaucracy India has. This is now really a case where it’s a miracle that India grows at all given the bureaucracy that it has. I tell you, this is about the worst encounter in the whole world.

Thursday, September 14, 2017

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the U.S. power grid.

In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.

Diversified Assets Outside the Banking System

Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.

Faber remembers how his father talked about rich people as millionaires. “That, in the ‘50s and ‘60s and ‘70s, was a lot of money. Today, a million is nothing at all—small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.”

After working on Wall Street for over two decades, Faber’s assets consisted mainly of bonds, equities, and real estate. He says it was in the 1990s when he realized that “it’s good to have a diversified asset outside the banking system and not financially related” and began to purchase some physical gold every month.

The Fed largely ignores gold as an asset, he says, because “gold is an embarrassment to central banks.”

Monday, September 11, 2017

Marc Faber, editor of the ’Gloom, Boom & Doom’ report, speaks to CNBC’s ’Squawk on the Street’ crew on his market outlook. Faber says he expects to see another 'massive' financial crisis in his lifetime.